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The recently concluded state assembly elections reveal that dynastic politics is alive and well in India. Above, Akhilesh Yadav, the newly elected chief minister of U.P. in front of a portrait of his father, Mulayam Singh Yadav.The recently concluded state assembly elections reveal that dynastic politics is alive and well in India. The new chief minister of Uttar Pradesh, Akhilesh Yadav, is the son of a former chief minister, as is the new chief minister of Uttarakhand, Vijay Bahuguna. In Punjab, Sukhbir Singh Badal, the deputy chief minister, is by all accounts waiting in the wings to succeed his elderly father, the current chief minister.

Don’t forget the states that didn’t go to the polls this time around. The charismatic chief minister of Jammu and Kashmir, Omar Abdullah, is the son and grandson of former chief ministers. Sometimes the dynastic link is less direct but no less obvious. The current chief minister of Andhra Pradesh, N.K.K. Reddy, is the son of a central government minister who served under Prime Minister Narasimha Rao. And he isn’t shy about it. His website proudly declares that he has the “right political lineage.”

Then there’s the grandest political dynasty of them all, the Gandhi-Nehru clan. While the scion, Rahul Gandhi, has surely suffered a setback after the Congress party’s poor showing in Uttar Pradesh, it would be foolish to write him off prematurely.

In a previous Economics Journal , I explored why political parties managed to remain dynastic rather than be truly democratic. The bottom line is that parties like the Congress have centralized political structures and don’t have internal democracy: candidates are chosen by the central party, not through local primary elections as would happen in other Westminster democracies.

The fact of dynasticism in politics in India is well known. But the economic effects of political dynasties are sorely under-researched, as I pointed out in my earlier piece.

The grandest political dynasty of them all is the Gandhi-Nehru clan. Above, Sonia Gandhi and Rahul Gandhi waved to their supporters in Uttar Pradesh.So what are the economic effects of dynastic politics in general? And do these sorts of effects show up here in India?

Political economy theory suggests that dynasticism should be economically harmful: a less competitive political space is likely to deliver a less efficient use of public resources. Arguably, last week’s Union Budget would have been more about reform and less about populist spending if Sonia Gandhi, the Congress party’s leader and the matriarch of the Nehru-Gandhi dynasty, had felt any real political heat from within her own party.

More directly, dynastic politicians who treat their state or the country as a family fiefdom are more likely to use public office to enrich themselves rather than promote the public good. The disgraced former chief minister of Karnataka, B.S. Yeddyurappa, is alleged to have personally profited from illegal mining in the state, as well as, allegedly, favoring his sons (one of whom is a Member of Parliament) in the allotment of government land.

More subtly, the stranglehold of a few dynastic families on politics might deter capable people from entering politics, since they figure they don’t stand a chance of winning. For those who do make it in, it’s highly unlikely they’ll rise as fast as their dynastic peers. Think of all of those 40 and 50 somethings in the Congress whose last name isn’t Gandhi, Deora, Pilot, or Abdullah. They might be perfectly competent, but have had to curtail their political aspirations.

In a recent study, which carries lessons for India, Ronald Mendoza, an economics professor at the Asian Institute of Management in the Philippines, along with his collaborators, examined the impact of dynastic politics in the Philippines.

“Political inequality is the mirror image of economic/income inequality,” he told me in an email. Further, the lack of political competition is mirrored by lack of competition in the economy as a whole – leading to the dominance of a few families or businesses. In the case of the Philippines, this goes back to the time of Spanish colonial rule, when influential families became both politically powerful and took over key industries. That nexus between politics and business continues to this day.

There’s a striking parallel to be found in India. Just as politics has been dominated by dynasties, Indian business, especially during the period of the License Permit Raj, was dominated by a few well connected families whose businesses had roots going back to the time of British rule. The Tata and Birla clans are only two of the more famous of such dynastic business houses. Although economic liberalization has weakened this pattern somewhat, it’s still true that a few business families are not only spectacularly wealthy but hold outsized political influence. That can’t be good either for politics or the economy.

Mr. Mendoza’s research reveals that dynastic families in politics in the Philippines are wealthier on average than non-dynastic politicians. While no one to my knowledge has yet crunched the numbers, that’s surely true in India as well. More disturbingly, he found that constituencies ruled by dynastic politicians correlated strongly with a greater incidence of poverty as well as higher income inequality. The study is careful to point out that one can’t necessarily assume there’s a causal relationship. While it’s true that dynastic politicians could be responsible for impoverishing their constituents, it could equally be true that dynastic politicians thrive in areas that are already poor and backward.

Again, it’s not hard to see how these findings might resonate in an Indian context. Consider Amethi and Rae Bareli, the two Lok Sabha constituencies held by the Nehru-Gandhi clan. They’re both in Uttar Pradesh, a poor state. So it’s difficult to statistically establish whether these two constituencies would be poorer still, or better off, if they weren’t dynastic. But, there’s certainly evidence, at least for Amethi, that it remains a very poor and backward area, despite whatever benefit might come from having Rahul Gandhi as its M.P.

The potentially corrosive effects of dynastic politics go beyond poverty and income inequality. Mr. Mendoza notes that political inequality generally, and dynastic politics in particular, is “pernicious” in so far as it retards a democracy’s ability to respond to its citizens’ needs and people’s empowerment in general.

In the Indian context, it would be hard to disagree with this judgment.

Rupa Subramanya writes Economics Journal for India Real Time. You can follow her on Twitter @RupaSubramanya.

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